Over the past decade, blockchain development has witnessed exponential growth with new decentralized applications (DApps) and interchain protocols launching every other day. As a result of the revolutionary leap forward, users have access to an open and trustless financial system, without middlemen, giving them full control over their assets. Nonetheless, like any nascent technology, blockchain development faces growing pains, particularly in the interchain sector
Among the most pressing challenges in multi-chain development are the building of sophisticated DApps, liquidity fragmentation, and poor user experience. All these issues pose a significant barrier to entry for new users, slowing the adoption of Web 3 as platforms become more difficult to navigate through.
In this article, we explore the challenges facing the multi-chain sector and how one emerging blockchain solution – Agoric Orchestration — is addressing the challenges, and how it leverages the Inter Protocol to ease liquidity fragmentation across the ecosystem.
Enter Agoric Orchestration
Platforms across the DeFi ecosystem are increasingly turning multi-chain as interoperability becomes a key innovative feature in the space. These platforms offer a fertile ground for innovation but are usually built across different blockchains or platforms, which creates ‘siloes’ of isolated financial platforms. This may cause several problems, primarily liquidity fragmentation, complexity of platform use, and additional costs when moving assets across different blockchains
Developers face challenges in building applications that can work seamlessly across the entire landscape, and the market’s overall efficiency is compromised. It’s a world where assets become confined within their enclosures, restricting the smooth circulation of capital, which is vital for a thriving financial system.
Here’s where Agoric Orchestration comes in. Aimed at reducing friction in building complex multi-chain DApps, the Agoric development team launched Orchestration. It helps DApps link to one another in a cohesive, interconnected ecosystem. Orchestration is the programming power to create unified user experiences in the world of async messaging across disparate blockchains and connection protocols. Simply, developers can leverage tools on Agoric Orchestration to create applications that operate across multiple blockchains in one ecosystem. This simplifies complex cross-chain interactions enabling users to transact and interact better across different DApps.
Key features driving Agoric Orchestration
The Agoric team introduced several key features to enable the efficient building of multi-chain applications and therefore enable Orchestration. Some of the features and tools include async/await & multi-block execution, timers, a JavaScript framework, and interoperability.
Agoric smart contracts support async/await functionality and multi-block execution, simplifying the creation of interoperable DApps. This allows developers to build simple one-click solutions in DApps across decentralized networks, which creates new opportunities for DApps with richer and more innovative qualities.
A timer service on Agoric allows smart contracts to autonomously awaken and perform new actions at predefined times, paving the way for more intricate applications. This fits with the async model discussed above as it enhances the autonomy of smart contracts and enables them to interact and execute tasks across different time frames.
Crucial to its build, Agoric smart contracts are written in a hardened version of JavaScript, providing developers with secure and safe features to build their DApps. Apart from reducing the risk of vulnerable smart contracts, developers can tap into the JavaScript natural composability to extend orchestration and allow DApps to integrate more easily across different blockchains.
How Inter Protocol’s IST token contributes to this ecosystem
The main benefit that Agoric offers is providing builders with interconnected communication across blockchains with its connections to the Inter-Blockchain Communication protocol (IBC) and extensibility to include powerful bridging solutions like Axelar’s General Message Passing (GMP). Developers can access liquidity via the IBC, which eases the liquidity fragmentation witnessed across the DeFi ecosystem.
To improve liquidity, Agoric integrated Inter Protocol and its native stablecoin, IST, revolutionizing staking within the Cosmos ecosystem. By leveraging Vaults on Inter Protocol, the platform allows users to turn their staked assets into productive collateral. Users can mint IST against their staked holdings and use the stablecoins across the ecosystem without losing their staking rewards. This innovative approach reduces liquidity fragmentation and allows users to leverage their assets in diverse ways, such as participating in lending, liquidity provision, and yield farming.
The role of IST effectively solves the liquidity challenges across DeFi and traditional staking, enabling the development of a more fluid and dynamic environment for stakers. It represents a significant step towards an ecosystem where assets are utilized more efficiently, fostering broader participation and smarter asset management.
Looking ahead – A brighter future for Agoric Orchestration
Blockchain technology is witnessing higher adoption rates and it is expected to continue into the future. However, challenges in the DeFi space such as ease of interoperability and liquidity fragmentation could be a barrier to the explosive adoption growth. Integrating solutions such as Agoric Orchestration and Inter Protocol could play a huge role in shaping the future of DeFi.
These technologies solve two of the most persistent problems – simple multi-chain interactions and utilizing staked assets – which could be the catalyst needed for the expansive growth of blockchain technology. The next step is for these solutions to be adopted across industries worldwide, smooth out the user experience and provide additional features that ease new participants into the space. This could lead to an even greater degree of liquidity and capital efficiency, which is the cornerstone of a mature financial ecosystem.
Final words
In conclusion, the evolution of blockchain technology, particularly in the realm of multi-chain development, has presented both unprecedented opportunities and formidable challenges. Nonetheless, the convergence of solutions such as Agoric Orchestration and Inter Protocol represents a significant milestone in the journey towards a more robust and inclusive blockchain ecosystem.
By fostering broader participation and improving user experience, these solutions lay the groundwork for blockchain technology to achieve its full potential as a global driver of financial innovation and inclusion.
